The appropriation and budget proposals encompass allocations of Rs. 39.5 billion for the housing sector, of which Rs. 38 billion is capital expenditure.
A major objective of this government is to make Sri Lanka into a home-owning democracy. Already substantial investment has gone into this sector across different value segments over the last 3 and a half years. At low income income levels the government bears the major part of the funding, at the mid-range level the government will share the costs of funding through subsidized loan schemes, and at the higher end the government will provide a conducive environment for private investments in housing.
Significant investment is allocated for low income housing with Rs. 7.5 billion allocated and a further Rs. 2.9 billion for estate housing.
In 2019 several middle income housing projects will commence, including projects in Wadduwa, Ragama, Yakkala, Kundasale, Borella, and Pannipitiya, among others.
Rs. 8.1 billion is allocated through the appropriations bill for the Urban Regeneration project.
The appropriation bill and budget proposals also suppors housing for re-settlement projects with a total allocation of Rs. 13.5 billion for this.
In addition to public housing, the government is supporting investment in private housing investments. The Home Sweet Home loan under the Enterprise Sri Lanka loan scheme will provide Rs. 10 million loans at concessionary financing of 6% for first time home buyers. This is another measure that will support middle income housing in Sri Lanka and help build a home owning democracy.
Enterprise Sri Lanka will also provide Rs. 10 mn concessionary financing for migrant workers to invest in a home in Sri Lanka. The government will bear 75% of the interest cost and provide a 2 year grace period out of a 15 year loan tenor.
To support local construction companies, in order to tender for future government projects, a foreign construction company must form a partnership with a local construction company. This will address the issues faced by local companies in facing up to international competition.
In order to reduce the costs of construction, the para-tariffs applied to selected construction materials will be reduced. The NBT for the main contractor in construction projects will also be made exempt.
To support the property development sector, a residential visa will be provided for 3 years for foreign nationals who invest US$ 300,000 or more in condominiums.
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